As the Ford government’s housing goal slips further out of reach, Finance Minister Peter Bethlenfalvy’s fall budget update steers attention away from the issue that once defined their second mandate.
The finance minister’s 2024 fall economic statement sidesteps Ontario’s housing crisis to spotlight the government’s tangential actions — like its limited-time moves to keep more money in taxpayers’ pockets, and how it’s addressing outdated infrastructure and economic well-being.
Since adopting a goal of facilitating the construction of 1.5 million new homes in Ontario from 2022 to 2031, Premier Doug Ford’s government has consistently lagged behind the pace needed to reach it. The Ford government-appointed expert panel that recommended the 1.5-million homes target had written that it “must” be reached “to address the supply shortage” in the province.
Ford himself has stated that 1.5 million new homes likely won’t be enough. “I think we're going to need probably 1.8 million,” the premier said in August 2023.
While the Ford government initially planned gradual increases toward the 150,000 new homes needed a year to reach its target, Ontario’s housing starts have declined annually since 2022. Construction began that year on 96,080 new builds, according to Canada Mortgage and Housing Corporation data.
The finance minister’s fall economic statement projects 81,300 housing starts in Ontario this year, which would fall well short of the PCs’ 2024 target of 125,000.
The Ford government began incorporating long-term care and retirement home beds, and laneway suites into its tally a year ago but still lags behind the goal by that metric.
Factors both within, and beyond, the control of the Ford government have affected new housing construction.
The Greenbelt scandal and the slew of housing policy reversals that followed it caused disruptions in the home-building sector. Ford’s PCs have also grappled internally over whether to take more aggressive steps to incentivize housing construction — which naysayers within the government have successfully shot down, in multiple cases.
Higher borrowing costs over the last couple of years have also negatively impacted development sector activity.
Activity in the development sector has also suffered as a result of higher borrowing costs.
“While progress is being made, homebuilders across the province continue to face a challenging economic environment, including elevated interest rates that impact the pace of new home construction,” Bethlenfalvy’s fall economic statement says.
Questioned about slumping housing numbers and whether 2031’s target is out of reach, Bethlenfalvy said Wednesday, “Things go up and down in cycles.”
“We’re not going to relent on putting in place the infrastructure necessary to get more built,” the finance minister said, adding that the government is “putting in the conditions for even greater growth down the road.”
The housing market has also cooled in recent years. Partly because of high interest rates, as well, prices of resold homes have been flat, and resale totals have fallen short of projections.
“Looking ahead, lower mortgage rates and more accommodative mortgage regulations recently announced by the federal government are expected to help housing demand recover,” Bethlenfalvy’s fall economic statement says. “However, challenges around housing affordability are expected to moderate gains in home resale and price growth in the projection period.”
Homelessness has also worsened in Ontario in the last couple of years. In July, there were almost twice as many people who received one of the province’s two main social assistance programs who were homeless as there were in June 2022, the month of the last election.
Bethlenfalvy’s 2024 fall economic statement — often referred to as a “mini-budget” — did not feature any new measures or funding to directly address housing affordability or homelessness. It’s also the first of the Ford government’s six budgets or mini-budgets since the 2022 election to not include the phrase “housing crisis.”
Housing Minister Paul Calandra said last week that the government was working to tackle homelessness “in a much bigger way (and) in a much more focused way,” adding that those actions could be unveiled “over the next couple of months.”
On Wednesday, Bethlenfalvy said the province will keep working with municipalities to address homelessness and pointed to its homelessness prevention program spending increases when asked about the absence of new measures to address the issue in the fall economic statement.
The fall economic statement emphasizes the government’s one-time $200 taxpayer rebate payment and its pause of the provincial gas tax and fuel tax — which has been in effect since July 2022 — as its key measures to combat affordability challenges.
The main housing-related actions touted by the Ford government in its mini-budget are a pair of grant programs — totalling almost $2 billion — that it’s paid, or promised to pay, municipalities to help them cover the costs of infrastructure projects to enable housing construction.
Bethlenfalvy’s fall economic statement does contain housing market projections, forecasting a resurgence in home resales next year, and steady growths in home values over the next three years.
After the finance minister released the fall economic statement, the leaders of Ontario’s opposition parties each said it clearly illustrates that the PCs aren’t going to meet their 1.5 million new homes by 2031 target.
“Where are the homes we were promised? Because we can't find any,” official Opposition and NDP Leader Marit Stiles said. “The only thing that gets built in Ontario are encampments under Doug Ford.”
In her response, Stiles also touted her party’s recently released “Homes Ontario” plan, which includes promises to widen the types of as-of-right housing that Ford’s PCs have opted against, while also having the province directly build co-op, geared-to-income and supportive housing.
Liberal Leader Bonnie Crombie said on Wednesday that the fall economic statement shows there’s “no conceivable way (Ontario) will meet the target” set by the Ford government.
"There are no incentives to build homes. Developers aren't building homes," Crombie added.
Green Leader Mike Schreiner said the government has "abandoned" young people who can't afford to buy a home, and those living on the streets.
"When I talk to people in the province of Ontario, they tell me they need an affordable home. $200 isn't gonna buy them a home, or pay the rent, or move somebody from a tent to permanent supportive housing," Schreiner said.
—With files from Jack Hauen
